WHAT CELLS TO USE IN WHATIF GOAL SEEK AS WELL AS SOLVER TO GET THE ANSWER FOR THE COST Given the preceding values, compute the average of the projected returns on beginning investment balances for the first five years of Acmes investment in PHC. What is the maximum Acme can pay for PHC if it wishes to earn at least a 10 percent average return on beginning investment balance?

Growth rate in income 10%

Dividends $30,000

Cost (Determined through Data/What-If/Goal Seek)

Annual amortization $15,000

1st year PHC income $185,000

Percentage owned 40%

PHC reported income $74,000 $81,400 $89,540 $98,494 $108,343

Amortization $15,000 $15,000 $15,000 $15,000 $15,000

Equity earnings $59,000 $66,400 $74,540 $83,494 $93,343

Beginning Balance ??? $47,000 $101,400 $163,940 $235,434

Equity earnings $59,000 $66,400 $74,540 $83,494 $93,343

Dividends $12,000 $12,000 $12,000 $12,000 $12,000

Ending Balance $47,000 $101,400 $163,940 $235,434 $316,777

Average

ROI #DIV/0! 141.28% 73.51% 50.93% 39.65% #DIV/0!